In addition to the Federal
Government's SR&ED program, several provinces also offer incentives for
research and development. Often the incentives are based on the SR&ED
qualifying expenditures, and generally, the credit/refund is administered by
CRA therefore eliminating the need to apply to two government departments.
Ontario and Quebec tax credits are accessed by filing provincial tax returns of
these provinces. For more information about provincial incentives, please feel
free to contact one of Iwasan's consultants.

British
Columbia

BC offers a 10% refundable
tax credit on expenditures for qualifying SR&ED carried out in the
province.

Ontario

Ontario offers an Ontario
Innovation Tax Credit (OITC), a 10% refundable tax credit available to all
companies that perform SR&ED in Ontario (subject to certain income and
capital tests).

Quebec

Quebec offers a refundable
credit of 17.5% to 37.5% (depending on the size of the company) on the first
$2M in R&D wages and certain other expenses. Also, 28% on all expenditures
for 'pre-competitive research'. Credits also apply to amounts paid to
subcontractors at reduced rates under some circumstances.

Manitoba

Manitoba offers a 20%
non-refundable income tax credit for qualifying expenditures incurred in
Manitoba. Unused credits can be carried forward up to 10 years or back up to 3
years.